2006 Minnesota Statutes

CHAPTER 325G. CONSUMER PROTECTION; SOLICITATION OF SALES

UNSOLICITED GOODS

325G.01 EFFECT OF DELIVERY.
Unless otherwise agreed, where unsolicited goods are addressed to and sent to a person,
the person has a right to refuse to accept delivery of the goods and is not bound to return such
goods to the sender. The receipt of such unsolicited goods shall for all purposes be deemed an
unconditional gift to the recipient who may use or dispose of the same in any manner the recipient
sees fit without any obligation to the sender.
History: 1969 c 609 s 1; 1986 c 444

CREDIT CARDS

325G.02 DEFINITIONS.
    Subdivision 1. Scope. For purposes of sections 325G.02 to 325G.04 the terms defined in
this section shall have meanings given them.
    Subd. 2. Financial transaction card. "Financial transaction card" means an instrument or
device, whether known as a credit card, credit plate, charge plate, courtesy card, bank services
card, banking card, check guarantee card, debit card, or by any other name issued with or without
fee by an issuer for the use of the holder to obtain credit, money, goods, services, or anything else
of value, but does not mean a telephone company credit card.
    Subd. 3. Person. "Person" includes an individual or family, and in the absence of agreement
to the contrary, a partnership, association, corporation or other legal or commercial entity.
    Subd. 4. Issuer. "Issuer" means a person or firm or its duly authorized agent, that issues a
financial transaction card.
History: 1969 c 1004 s 1; 1985 c 243 s 1,2

325G.03 UNSOLICITED FINANCIAL TRANSACTION CARDS.
No person in whose name a financial transaction card is issued shall be liable for any amount
resulting from use of that card from which that person or a member of the person's family or
household derives no benefit unless the person has accepted the card by (1) signing or using the
card, or (2) authorizing the use of the card by another. A mere failure to destroy or return an
unsolicited financial transaction card is not such an acceptance. Signing or using a card is not
acceptance if those acts were performed under duress as defined under section 609.08.
History: 1969 c 1004 s 2; 1985 c 243 s 3; 1986 c 444

325G.04 LOST OR STOLEN FINANCIAL TRANSACTION CARDS.
    Subdivision 1. Liability limited. No person in whose name a financial transaction card
has been issued which the person has accepted as provided in section 325G.03 shall be liable
for any amount in excess of $50 resulting from the unauthorized use of the card from which the
person or a member of the person's family or household derives no benefit; provided, however,
that the limitation on liability of this subdivision shall be effective only if the issuer is notified of
any unauthorized charges contained in a bill within 60 days of receipt of the bill by the person
in whose name the card is issued.
    Subd. 2. Unauthorized use. No person in whose name a financial transaction card is issued
shall be liable for any amount resulting from the unauthorized use of the financial transaction
card after receipt by the issuer of notice that the card has been lost or stolen and from which such
person or a member of the person's family or household derives no benefit.
    Subd. 3. Unauthorized use defined. For purposes of subdivisions 1 and 2, "unauthorized
use" means a use by a person other than the customer who does not have actual, implied, or
apparent authority for the use.
History: 1969 c 1004 s 3; 1985 c 243 s 4; 1986 c 444; 1987 c 349 art 1 s 37

325G.041 MARRIED WOMAN; NAME ON CARD.
If a financial transaction card issuer has determined in the normal course of business that
it will issue a card to a married woman, the card shall be issued bearing either her current or
former surname, as the woman may direct.
Financial transaction card issuers may require that a married woman requesting a card in a
former surname open a new account in that name. Refusal to issue a financial transaction card
pursuant to this section constitutes an unfair discriminatory practice under section 363A.16.
History: 1984 c 533 s 1; 1985 c 243 s 5; 1984 c 533 s 1; 1985 c 243 s 5

325G.042 CONSUMER CREDIT; EQUAL TREATMENT OF SPOUSES.
    Subdivision 1. Consideration required; spousal credit history. To the extent that a creditor
considers credit history in evaluating the credit worthiness of similarly qualified applicants for
a similar type and amount of credit, in evaluating an applicant's credit worthiness, a creditor
shall consider:
(1) the credit history, when available, of accounts designated as accounts that the applicant
and the applicant's spouse are permitted to use or for which both are contractually liable;
(2) at the applicant's request, any information the applicant may present that tends to indicate
that the credit history being considered by the creditor does not accurately reflect the applicant's
creditworthiness; and
(3) at the applicant's request, the credit history, when available, of any account reported in
the name of the applicant's spouse or former spouse that the applicant can demonstrate accurately
reflects the applicant's credit worthiness.
    Subd. 2. Credit reporting; equal treatment of spouses. (a) A creditor that furnishes credit
information shall designate:
(1) any new credit account to reflect the participation of both spouses if the applicant's
spouse is contractually liable on the account, other than as a guarantor, surety, endorser, or similar
party; and
(2) any existing credit account to reflect such participation, within 90 days after receiving a
written request to do so from one of the spouses.
(b) If a creditor furnishes credit information to a consumer reporting agency concerning a
credit account designated to reflect the participation of both spouses, the creditor shall furnish
the information in a manner that will enable the agency to provide access to the information in
the name of each spouse.
(c) If a creditor furnishes credit information in response to an inquiry concerning a credit
account designated to reflect the participation of both spouses, the creditor shall furnish the
information in the name of the spouse about whom the information is requested.
    Subd. 3. Defense. A creditor's failure to comply with this section is not a violation if it results
from an inadvertent error, provided that the creditor promptly, and at no cost to the applicant or
borrower, rectified the error after it was brought to the creditor's attention.
    Subd. 4. Enforcement. (a) Enforcement of this section is under section 8.31, except that in a
private cause of action under section 8.31, subdivision 3a, the damages are limited to $1,000 and
the plaintiff has no right to recover costs of investigation and attorney fees.
(b) No one may bring a private cause of action under this section unless the individual has
first in good faith attempted to correct the problem with the party violating the section.
    Subd. 5. Compliance with federal law. Compliance with the requirements of the Federal
Consumer Credit Protection Act, title VII (Equal Credit Opportunity), United States Code, title
15, section 1691 et seq., as amended and the regulations promulgated under those sections dealing
with the subject matter of this section, shall be deemed to be in compliance with this section.
    Subd. 6. Definition of account. For purposes of this section, the term "account" means an
extension of consumer credit and the word "use" in relation to an account refers only to open-end
credit.
History: 1998 c 327 s 1

325G.05 DISPUTED ACCOUNTS.
    Subdivision 1. Billing information. Every financial transaction card issuer shall include on
each billing statement the name, address, and telephone number of the department designated by
it to receive requests by the customer account holder to correct mistakes or make adjustments to
the billing statement.
    Subd. 2. Required response. Every financial transaction card issuer, within 30 days of
receipt from a customer account holder, in writing at the address specified in subdivision 1, of a
questioned or disputed charge, shall conduct an individual inquiry into the facts and send to the
customer account holder an explanatory response in clear and definite terms.
    Subd. 3. Violation. A violation of this section shall be treated as a violation of section
325F.69.
History: 1973 c 460 s 1; 1985 c 243 s 6

325G.051 SURCHARGES ON CREDIT CARDS.
    Subdivision 1. Limitation; prohibition. (a) A seller of goods or services may impose a
surcharge on a purchaser who elects to use a credit card in lieu of payment by cash, check, or
similar means, provided (1) the seller informs the purchaser of the surcharge both orally at the
time of sale and by a sign conspicuously posted on the seller's premises, and (2) the surcharge
does not exceed five percent of the purchase price.
(b) A seller of goods or services that establishes and is responsible for its own customer
credit card may not impose a surcharge on a purchaser who elects to use that credit card in lieu
of payment by cash, check, or similar means.
(c) For purposes of this section "surcharge" means a fee or charge imposed by a seller upon a
buyer that increases the price of goods or services to the buyer because the buyer uses a credit
card to purchase the goods or services. The term does not include a discount offered by a seller to
a buyer who makes payment for goods or services by cash, check, or similar means not involving
a credit card if the discount is offered to all prospective buyers and its availability is clearly and
conspicuously disclosed to all prospective buyers.
    Subd. 2. Penalty. A seller who violates this section is subject to a civil penalty of not more
than $500 and shall refund the surcharge to each buyer.
History: 1987 c 172 s 1

325G.052 CREDIT CARD OFFERS AND SOLICITATIONS; ADDRESS
VERIFICATIONS.
(a) A credit card issuer that mails an offer or solicitation to receive a credit card and, in
response, receives a completed application for a credit card that lists an address that is different
from the address on the offer or solicitation shall verify the change of address before issuing a
credit card.
(b) Notwithstanding any other provision of law, a person to whom an offer or solicitation
to receive a credit card is made is not liable for the unauthorized use of a credit card issued in
response to that offer or solicitation if the credit card issuer does not verify the change of address
pursuant to paragraph (a) before the issuance of the credit card, unless the credit card issuer
proves that this person actually incurred the charge on the credit card.
(c) When a credit card issuer receives a written or oral request for a change of the
cardholder's billing address and then receives a written or oral request for an additional credit
card within ten days after the requested address change, the credit card issuer shall not mail
the requested additional credit card to the new address or, alternatively, shall not activate the
requested additional credit card, unless the credit card issuer has verified the change of address.
History: 2006 c 233 s 10

HOME SOLICITATION SALES

325G.06 DEFINITIONS.
    Subdivision 1. Scope. As used in sections 325G.06 to 325G.11, the terms defined in this
section have the meanings given them.
    Subd. 2. Home solicitation sale. "Home solicitation sale" means a sale of goods or services,
by a seller who regularly engages in transactions of the same kind, purchased primarily for
personal, family or household purposes, and not for agricultural purposes, with a purchase price
of more than $25, in which the seller or a person acting for the seller personally solicits the sale,
and when the buyer's agreement or offer to purchase is made at a place other than the place of
business of the seller, except as otherwise provided in this subdivision. It does not include:
(a) a sale made pursuant to prior negotiations in the course of a visit by the buyer to a retail
business establishment having a fixed permanent location where the goods are exhibited or the
services are offered for sale on a continuing basis; or
(b) a sale in which the buyer has initiated the contact and the goods or services are needed to
meet a bona fide immediate personal emergency of the buyer and the buyer furnishes the seller
with a separate dated and signed statement not furnished by the seller describing the situation
requiring immediate remedy and expressly acknowledging and waiving the right to cancel
the sale. This exclusion shall only apply where (i) the seller in good faith makes a substantial
beginning of performance of the contract before the buyer gives notice of cancellation, and, (ii) in
the case of goods, the goods cannot be returned to the seller in substantially as good condition
as when received by the buyer; or
(c) a sale in which the buyer has initiated the contact and specifically requested the seller to
visit the buyer's home for the purpose of repairing or performing maintenance upon the buyer's
property. If in the course of such a visit, the seller sells the buyer the right to receive additional
services or goods other than replacement parts necessarily used in performing the maintenance
or in making the repairs, the sale of those additional goods or services would not fall within
this exclusion; or
(d) a sale in which the buyer has initiated the contact either by oral, telephone, or written
request (other than on a form provided by the seller), and requested the seller to visit the buyer's
home for the purpose of negotiating the purchase of the specific good or service requested. This
exclusion shall only apply where the buyer furnishes the seller with a separate dated and signed
statement in the buyer's handwriting expressly acknowledging and waiving the right to cancel
the sale; or
(e) a sale of insurance, securities, or real property; or a sale by public auction; or
(f) a sale of a motor vehicle, as defined in section 168.011, subdivision 4, when the buyer's
agreement or offer to purchase is made at a place other than the buyer's place of residence.
    Subd. 3. Sale. "Sale" includes a lease or rental.
    Subd. 4. Seller. "Seller" includes a lessor or anyone offering goods for rent, or an assignee of
the seller.
    Subd. 5. Buyer. "Buyer" includes a lessee or anyone who gives a consideration for the
privilege of using goods or services.
    Subd. 6. Business day. "Business day" means any day other than a Saturday, Sunday, or
holiday as defined in section 645.44.
History: 1973 c 443 s 1; 1979 c 128 s 1; 1986 c 444

325G.07 BUYER'S RIGHT TO CANCEL.
In addition to any other rights the buyer may have, the buyer has the right to cancel a
home solicitation sale until midnight of the third business day after the day on which the
home solicitation sale occurs. Cancellation is evidenced by the buyer giving written notice of
cancellation to the seller at the address stated in the agreement or offer to purchase. Notice of
cancellation, if given by mail, is effective upon deposit in a mailbox, properly addressed to the
seller and postage prepaid. Notice of cancellation need not take a particular form and is sufficient
if it indicates, by any form of written expression, the intention of the buyer not to be bound by
the home solicitation sale.
History: 1973 c 443 s 2

325G.08 WRITING REQUIRED; NOTICE OF RIGHT TO CANCEL; NOTICE OF
CANCELLATION.
    Subdivision 1. Seller's obligations. In a home solicitation sale, at the time the sale occurs,
the seller shall:
(a) inform the buyer orally of the right to cancel;
(b) furnish the buyer with a fully completed receipt or copy of a contract pertaining to the
sale which shows the date of the transaction, contains the name and address of the seller, and in
immediate proximity to the space reserved in the contract for the signature of the buyer or on the
front page of the receipt if a contract is not used and in boldface type of a minimum size of ten
points, a statement in substantially the following form:
"You, the buyer, may cancel this purchase at any time prior to midnight of the third business
day after the date of this purchase. See attached notice of cancellation form for an explanation of
this right."; and
(c) furnish each buyer a fully completed form in duplicate, captioned, "NOTICE OF
CANCELLATION," which shall be attached to the contract or receipt and easily detachable, and
which shall contain in boldface type of a minimum size of ten points the following information
and statements:

		"NOTICE OF CANCELLATION
		(enter type of goods or services purchased)
		(goods or services)
		(enter date of transaction)
		(date)

If you do not want the goods or services described above, you may cancel your purchase
by mailing or delivering a signed and dated copy of this cancellation notice or any other written
notice, or send a telegram to (Name of seller), at (Address of Seller's Place of Business) not later
than midnight of (Date). If you cancel, any payments made by you under the contract or sale, any
property traded in, and any instrument executed by you will be returned within ten business days
following receipt by the seller of your cancellation notice, and any security interest arising out
of the transaction will be canceled.
If you cancel, you must make available to the seller at your residence, in substantially as
good condition as when received, any goods delivered to you under this contract or sale; or you
may, if you wish, comply with the written instructions of the seller regarding the return shipment
of the goods at the seller's expense and risk.
If the seller does not pick up the goods within 20 days of the date of your notice of
cancellation, you may retain or dispose of them without any further obligation.

	I HEREBY CANCEL THIS TRANSACTION.
	(Date)
		"
		(Buyer's signature)

    Subd. 2. Alternative cancellation notice. In lieu of the notice of cancellation required
by subdivision 1, the seller may provide a notice which conforms to applicable federal law or
regulation so long as it provides the information required by subdivision 1. Until the seller has
complied with this section the buyer may cancel the home solicitation sale by notifying the seller
in any manner and by any means of the intention to cancel.
History: 1973 c 443 s 3; 1986 c 444

325G.09 RETURN OF PAYMENTS OR GOODS.
    Subdivision 1. Seller's obligations. Within ten days after a home solicitation sale has been
canceled or an offer to purchase revoked, the seller must tender to the buyer any payments made
by the buyer and any note or other evidence of indebtedness. If the down payment includes goods
traded in, the goods must also be tendered by the seller in as good condition as when received by
the seller. If the seller fails to tender said goods, the buyer may elect to recover from the seller an
amount equal to the trade-in allowance stated in the agreement.
    Subd. 2. Buyer's right to retain possession. Until the seller has complied with the
obligations imposed by this section, the buyer may retain possession of the goods delivered
to the buyer by the seller.
    Subd. 3. Buyer's obligation to tender goods. Except as provided in subdivision 2, within a
reasonable time after a home solicitation sale has been canceled or an offer to purchase has been
revoked, the buyer upon demand must tender to the seller any goods delivered by the seller
pursuant to the sale. The buyer is not obligated to tender at any place other than the buyer's
residence.
    Subd. 4. Seller's failure to demand possession. If the seller fails to demand possession of
goods within 20 days after cancellation or revocation, the goods become the property of the buyer
without obligation to pay for them.
    Subd. 5. Buyer's duty of care. The buyer has the duty to take reasonable care of the goods
in the buyer's possession before cancellation or revocation and during the time provided in
subdivision 4 for the seller to demand possession, during which time the goods are otherwise at
the seller's risk.
    Subd. 6. Right to compensation limited. If the seller has performed any services pursuant
to a home solicitation sale prior to its cancellation, the seller is entitled to no compensation.
History: 1973 c 443 s 4; 1986 c 444

325G.10 PENALTIES FOR VIOLATION.
Any person who is found to have violated sections 325G.06 to 325G.09 shall be subject to
the penalties provided in section 8.31.
History: 1973 c 443 s 5

325G.11 DAMAGES.
Any person injured by a violation of sections 325G.06 to 325G.09 may recover damages,
together with costs and disbursements, including reasonable attorney's fees, and receive other
equitable relief as determined by the court.
History: 1973 c 443 s 6

PERSONAL SOLICITATION OF SALES

325G.12 DEFINITIONS.
    Subdivision 1. Scope. As used in sections 325G.12 to 325G.14, the terms defined in this
section have the meanings given them.
    Subd. 2. Personal solicitation. "Personal solicitation" means any attempt by a seller who
regularly engages in transactions of the same kind, to sell goods or services which are primarily
for personal, family, or household purposes, and not for agricultural purposes, when either the
seller or a person acting for the seller, contacts the buyer by telephone or in person other than
at the place of business of the seller, except:
(a) an attempted sale in which the buyer personally knows the identity of the seller, the name
of the business firm or organization the seller represents, and the identity or kinds of goods or
services offered for sale; or
(b) an attempted sale in which the buyer has initiated the contact with the seller; or
(c) an attempted sale of a newspaper subscription in which the seller is a minor child engaged
in both the delivery and sale of the newspaper.
    Subd. 3. Sale. "Sale" includes a lease or rental.
    Subd. 4. Seller. "Seller" includes a lessor or anyone offering goods for rent, or an assignee
of a seller.
    Subd. 5. Buyer. "Buyer" includes a lessee or anyone who gives a consideration for the use
of goods or services.
History: 1975 c 372 s 1; 1976 c 239 s 92; 1986 c 444

325G.13 DISCLOSURE OBLIGATION.
Before any personal solicitation every seller shall, at the time of initial contact or
communication with the potential buyer, clearly and expressly disclose: the individual seller's
name, the name of the business firm or organization the seller represents, the identity or kinds of
goods or services the seller wishes to demonstrate or sell, and that the seller wishes to demonstrate
or sell the identified goods or services. When the initial contact is made in person, the seller shall
also show the potential buyer an identification card which clearly states the seller's name and the
name of the business or organization represented. The disclosures required by this section shall be
made before asking any questions or making any statements except an initial greeting. Nonprofit
organizations are exempt from the requirements of this section.
History: 1975 c 372 s 2; 1986 c 444

325G.14 PENALTIES; REMEDIES.
Any person who is found to have violated section 325G.13 shall be subject to the penalties
and remedies provided in section 8.31.
History: 1975 c 372 s 3

CONSUMER CREDIT SALES

325G.15 DEFINITIONS.
    Subdivision 1. Scope. As used in this section and section 325G.16, the following terms shall
have the meanings assigned to them.
    Subd. 2. Consumer credit sale. "Consumer credit sale" means a sale of goods or services in
which
(a) credit is granted by a seller who regularly engages as a seller in credit transactions of
the same kind;
(b) the buyer is a natural person; and
(c) the goods or services are purchased primarily for a personal, family or household
purpose, and not for commercial, agricultural, or business purpose.
    Subd. 3. Goods. "Goods" means all tangible personal chattels, but not including money,
things in action or intangible personal property other than merchandise certificates or coupons
as herein described. The term includes such chattels which are furnished or used, at the time of
sale or subsequently, in the modernization, rehabilitation, repair, alteration, improvement or
construction of real property so as to become a part thereof whether or not severable therefrom.
The term also includes merchandise certificates or coupons, issued by a retail seller, not
redeemable in cash and to be used in their face amount in lieu of cash, in exchange for goods or
services sold by such seller.
    Subd. 4. Services. "Services" means work, labor, or services of any kind.
    Subd. 5. Sale of goods. "Sale of goods" includes, without limitation, any agreement in the
form of a bailment or lease of goods if the bailee or lessee agrees to pay as compensation for use a
sum substantially equivalent to or in excess of the aggregate value of the goods involved and it
is agreed that the bailee or lessee will become, or for no other or a nominal consideration has
the option to become, the owner of the goods upon full compliance with the bailee's or lessee's
obligations under the agreement. The term also includes a contract in the form of a terminable
bailment or lease of goods if: (a) the bailee or lessee has the option to renew the contract by
making the payments specified in the contract; (b) the contract obligates the bailor or lessor to
transfer ownership of the property to the bailee or lessee for no other or a nominal consideration
upon full compliance by the bailee or lessee with the bailee's or lessee's obligations under the
contract including any obligation incurred by reason of the exercise of an option by the bailee
or lessee to renew the contract; and (c) the payments contracted for by the bailee or lessee,
including those payments pursuant to the exercise of an option by the bailee or lessee to renew
the contract, are substantially equivalent to or in excess of the aggregate value of the property
and services involved.
History: 1971 c 275 s 1; 1981 c 10 s 1; 1986 c 444

325G.16 RESTRICTIONS.
    Subdivision 1. Instruments. In a consumer credit sale, the seller or lessor may not take a
negotiable instrument other than a check as evidence of the obligation of the buyer or lessee. A
holder is not in good faith if the holder takes a negotiable instrument with notice that it is issued
in violation of this section.
    Subd. 2. Provision restrictions. No contract or obligation relating to a consumer credit sale
shall contain any provision by which:
(a) The consumer agrees not to assert against an assignee any claim or defense arising
out of the transaction;
(b) In the absence of consumer's default, the holder may arbitrarily and without reasonable
cause, accelerate the maturity of any part or all of the amount owing thereunder;
(c) A power of attorney is given to confess judgment in this state, or an assignment of
wages is given;
(d) The seller or holder of the contract or obligation, or a person acting on the seller's or
holder's behalf, is given authority to enter upon the consumer's premises unlawfully or to commit
any breach of the peace in the repossession of the goods;
(e) The consumer waives any right of action against the seller or holder of the contract
or obligation, or any other person acting on the seller's or holder's behalf, for any illegal act
committed in the collection of payments under the contract or obligation or in the repossession
of goods;
(f) The consumer relieves the seller from any liability for any legal remedy which the
consumer may have against the seller under the contract or obligation or any separate instrument
executed in connection therewith.
    Subd. 3. Claims and defenses. Any assignee of the contract or obligation relating to the
consumer credit sale shall be subject to all claims and defenses of the consumer against the seller
arising from the sale, notwithstanding any agreement to the contrary. Provided, however, that the
assignee's liability under this subdivision shall not exceed the amount owing to the assignee at the
time the claim or defense is asserted against the assignee. The rights of the consumer under this
subdivision can only be asserted as a matter of defense to or set off against a claim by the assignee.
    Subd. 4. Interest retained by bailor or lessor. Any lease or bailment of goods which
constitutes a consumer credit sale shall be deemed to be a sale for all purposes. The interest
retained by the bailor or lessor in any such transaction shall be a security interest only.
    Subd. 5. Mandatory provision. All contracts or obligations in the form of terminable
bailment or lease of goods relating to consumer credit sales shall specify whether the goods which
are the subject of the sale are new or used.
History: 1971 c 275 s 2; 1981 c 10 s 2,3; 1986 c 444

CONSUMER WARRANTIES

325G.17 DEFINITIONS.
    Subdivision 1. Scope. As used in sections 325G.17 to 325G.20, the terms defined in this
section have the meanings given them.
    Subd. 2. Consumer sale. "Consumer sale" means a sale of new goods, or as regards an
express warranty, any goods, purchased primarily for personal, family, or household purposes,
and not for agricultural or business purposes.
    Subd. 3. Goods. "Goods" are as defined in section 325G.15.
    Subd. 4. New goods. "New goods" mean those goods which are purchased for the first
time other than for purposes of resale.
    Subd. 5. Express warranty. "Express warranty" means a written statement arising out
of a consumer sale pursuant to which the manufacturer, distributor, or retailer undertakes (1)
to preserve or maintain the utility or performance of the goods or provide compensation or
replacement if there is a failure in utility or performance; or (2) declares that in the event of any
sample or model, that the whole of the goods conforms to the sample or model. It is not necessary
to the creation of an express warranty that formal words such as "warrant" or "guarantee" be
used or that a specific intention to make a warranty be present, but an affirmation merely of the
value of the goods or a statement purporting to be merely an opinion or commendation of the
goods does not create a warranty.
History: 1973 c 692 s 1

325G.18 IMPLIED WARRANTIES.
    Subdivision 1. Merchantability and fitness for intended purpose. Unless disclaimed in the
manner prescribed in subdivision 2, every consumer sale in this state shall be accompanied by
an implied warranty that the goods are merchantable, and, in a consumer sale where the seller
has reason to know that the goods are required for a particular purpose and that the buyer is
relying on the seller's skill or judgment to select or furnish suitable goods, an implied warranty
of fitness. A seller may, however, limit damages or remedies for breach of implied warranties
as provided in chapter 336.
    Subd. 2. Disclaimers. No consumer sale on an "as is" or "with all faults" basis shall be
effective to disclaim the implied warranty of merchantability, or, where applicable, the implied
warranty of fitness, unless a conspicuous writing clearly informs the buyer, prior to the sale, in
simple and concise language each of the following:
(1) the goods are being sold on an "as is" or "with all faults" basis; and
(2) the entire risk as to the quality and performance of the goods is with the buyer.
In event of a consumer sale by means of a mail order catalog, the catalog may contain the
required writing in lieu of the requirement of notification prior to the sale.
History: 1973 c 692 s 2

325G.19 EXPRESS WARRANTIES.
    Subdivision 1. Disclaimers. No express warranty arising out of a consumer sale of new
goods shall disclaim implied warranties of merchantability, or, where applicable, of fitness.
    Subd. 2. Honoring of express warranties. The maker of an express warranty arising out of
a consumer sale in this state shall honor the terms of the express warranty. In a consumer sale, the
manufacturer shall honor an express warranty made by the manufacturer; the distributor shall
honor an express warranty made by the distributor; and the retail seller shall honor an express
warranty made by the retail seller.
    Subd. 3. Liability of manufacturer to retailer. Every manufacturer who makes an express
warranty pursuant to a consumer sale, who authorizes a retail seller within this state to perform
services or repairs under the terms of the express warranty shall be liable to the retail seller in an
amount equal to that which is charged by the retail seller for like service or repairs rendered to
retail consumers who are not entitled to warranty protection.
History: 1973 c 692 s 3

325G.20 REMEDIES.
A violation of sections 325G.17 to 325G.20 shall be treated as a violation of section 325F.69.
The remedies provided by sections 325G.17 to 325G.20 are cumulative and shall not be construed
as restricting any remedy that is otherwise available.
History: 1973 c 692 s 4

ASSISTIVE DEVICE WARRANTIES

325G.203 DEFINITIONS.
    Subdivision 1. Terms. For purposes of sections 325G.203 to 325G.208, the terms in this
section have the meanings given them.
    Subd. 2. Assistive device. "Assistive device" is an item, piece of equipment, or product
system that is designed and used to increase, maintain, or improve functional capabilities of
individuals with disabilities in the areas of seeing, hearing, speaking, walking, breathing,
performing manual tasks, learning, caring for oneself, or working. The term includes, but is not
limited to: manual wheelchairs, motorized wheelchairs, motorized scooters, and other aids that
enhance the mobility of an individual; hearing aids, assistive listening devices, and other aids that
enhance an individual's ability to hear or communicate; voice-synthesized computer modules,
optical scanners, talking software, Braille printers, large print materials, and other devices that
enhance an individual's ability to access print or communicate; and other assistive devices such
as environmental controls, adaptive transportation aids, communication boards, and modified
environments. "Assistive device" does not include a transcutaneous electrical nerve stimulator,
neuromuscular electrical stimulator, or dynamic range of motion splint, if the stimulator or splint
is already covered by a warranty.
    Subd. 3. Assistive device dealer. "Assistive device dealer" means a person who is in the
business of selling new assistive devices.
    Subd. 4. Assistive device lessor. "Assistive device lessor" means a person who leases new
assistive devices to consumers, or who holds the lessor's rights, under a written lease.
    Subd. 5. Collateral costs. "Collateral costs" means expenses incurred by a consumer in
connection with the repair of a nonconformity, including the cost of sales tax and of obtaining an
alternative assistive device.
    Subd. 6. Consumer or agency. "Consumer" or "agency" means any of the following:
(1) the purchaser of an assistive device, if the assistive device was purchased from an
assistive device dealer or manufacturer for purposes other than resale;
(2) a person to whom the assistive device is transferred for purposes other than resale, if the
transfer occurs before the expiration of an express warranty applicable to the assistive device;
(3) a person who may enforce the warranty; or
(4) a person who leases an assistive device from an assistive device lessor under a written
lease.
    Subd. 7. Demonstrator. "Demonstrator" means an assistive device used primarily for the
purpose of demonstration to the public.
    Subd. 8. Early termination cost. "Early termination cost" means an expense or obligation
that an assistive device lessor incurs as a result of both the termination of a written lease before
the termination date set forth in that lease and the return of an assistive device to the manufacturer.
The term includes a penalty for prepayment under a finance arrangement.
    Subd. 9. Early termination savings. "Early termination savings" means an expense or
obligation that an assistive device lessor avoids as a result of both the termination of a written
lease before the termination date set forth in that lease and the return of an assistive device
to a manufacturer. The term includes an interest charge that the assistive device lessor would
have paid to finance the assistive device or, if the assistive device lessor does not finance the
assistive device, the difference between the total period of the lease term remaining after the early
termination and the present value of that amount at the date of the early termination.
    Subd. 10. Manufacturer. "Manufacturer" means a person who manufactures or assembles
assistive devices and agents of that person, including an importer, a distributor, a factory branch,
distributor branch, and a warrantor of the manufacturer's assistive device. The term does not
include an assistive device dealer or lessor.
    Subd. 11. Nonconformity. "Nonconformity" means a specific condition or generic defect
or malfunction, or a defect or condition that substantially impairs the use, value, or safety of
an assistive device, but does not include a condition or defect that is the result of abuse or
unauthorized modification or alteration of the assistive device by the consumer.
For those assistive devices regulated under section 148.5197, "nonconformity" does not
include a condition of the device that is the result of normal use which could be resolved through
fitting adjustments, cleaning, or proper care.
    Subd. 12. Reasonable attempt to repair. "Reasonable attempt to repair" means any of the
following occurring within the term of an express warranty applicable to a new assistive device:
(1) the manufacturer, assistive device lessor, or any of the manufacturer's authorized assistive
device dealers accepts return of the new assistive device for repair at least two times; or
(2) the assistive device is out of service for an aggregate of at least 30 cumulative days
because of warranty nonconformities.
History: 1995 c 193 s 1; 1996 c 384 s 6; 1996 c 412 art 3 s 33; 2005 c 147 art 7 s 19

325G.204 EXPRESS WARRANTIES.
    Subdivision 1. Requirement. A manufacturer who sells or leases a new assistive device to a
consumer, either directly or through an assistive device dealer or lessor, shall furnish the consumer
with an express warranty to preserve or maintain the utility or performance of the assistive device.
The duration of the express warranty must not be less than one year after first possession of
the assistive device by the consumer. If a manufacturer fails to furnish an express warranty as
required by this section, the assistive device shall be covered by an express warranty as if the
manufacturer had furnished an express warranty to the consumer as required by this section.
    Subd. 2. Nonconforming device. If a new assistive device does not conform to an applicable
express warranty and the consumer reports the nonconformity to the manufacturer, the assistive
device lessor, or any of the manufacturer's authorized assistive device dealers and makes the
assistive device available for repair before one year after first possession of the device by the
consumer, the nonconformity must be repaired or replaced.
History: 1995 c 193 s 2

325G.205 ASSISTIVE DEVICE REPLACEMENT OR REFUND.
    Subdivision 1. Requirement. If, after a reasonable attempt to repair, the nonconformity is
not repaired, the manufacturer shall carry out, at the option of the consumer, the requirements
under paragraph (a) or (b), whichever is appropriate.
(a) To provide for refunds, at the request of the consumer, the manufacturer shall do one of
the following:
(1) accept return of the assistive device and refund to the consumer and to a holder of a
perfected security interest in the consumer's assistive device, as their interest may appear, the
full purchase price plus any finance charge, amount paid by the consumer at the point of sale and
collateral costs, less a reasonable allowance for use; or
(2) accept return of the assistive device, refund to the assistive device lessor and to a holder
of a perfected security interest in the assistive device, as their interest may appear, the current
value of the written lease and refund to the consumer the amount that the consumer paid under the
written lease plus collateral costs, less a reasonable allowance for use.
(b) To receive a comparable new assistive device, a consumer shall offer to the manufacturer
of the assistive device having the nonconformity to transfer possession of that assistive device
to that manufacturer. No later than 30 days after that offer, the manufacturer shall provide the
consumer with the comparable new assistive device or a refund. When the manufacturer provides
the new assistive device or refund, the consumer shall return the assistive device having the
nonconformity to the manufacturer, along with any endorsements necessary to transfer real
possession to the manufacturer.
    Subd. 2. Refund. If, after a reasonable attempt to repair, the nonconformity is not repaired,
an assistive device lessor shall receive a refund from the manufacturer. To receive a refund, the
assistive device lessor shall offer to transfer possession of a nonconforming assistive device to its
manufacturer. No later than 30 days after that offer, the manufacturer shall provide the refund
to the assistive device lessor. When the manufacturer provides the refund, the assistive device
lessor shall provide to the manufacturer any endorsements necessary to transfer legal possession
to the manufacturer.
    Subd. 3. Current value of lease. Under this section, the current value of the written lease
equals the total amount for which that lease obligates the consumer during the period of the lease
remaining after its early termination, plus the assistive device dealer's early termination costs and
the value of the assistive device at the lease expiration date if the lease sets forth that value, less
the assistive device lessor's early termination savings.
    Subd. 4. Reasonable allowance. Under this section, a reasonable allowance for use may not
exceed the amount obtained by multiplying the total amount the consumer paid or for which the
written lease obligates the consumer by a fraction, the denominator of which is 1,825 and the
numerator of which is the number of days that the consumer used the assistive device before first
reporting the nonconformity to the manufacturer, assistive device lessor, or assistive device dealer.
    Subd. 5. Limit on enforcement of lease. No person may enforce the lease against the
consumer after the consumer receives a refund.
History: 1995 c 193 s 3

325G.206 NONCONFORMITY DISCLOSURE REQUIREMENT.
No assistive device returned by a consumer or assistive device lessor in this state or another
state may be sold or leased in this state unless full disclosure of the reason for return is made to a
prospective buyer or lessee.
History: 1995 c 193 s 4

325G.207 OTHER REMEDIES.
    Subdivision 1. Other rights and remedies available. Sections 325G.203 to 325G.208 do
not limit rights or remedies available under any other law.
    Subd. 2. Waiver of rights void. A waiver of rights by a consumer under sections 325G.203
to 325G.208 is void.
    Subd. 3. Private right of action. In addition to pursuing other remedies, a consumer may
bring an action to recover damages caused by a violation of sections 325G.203 to 325G.208. The
court shall award a consumer who prevails in the action, twice the amount of any pecuniary
loss, together with costs, disbursements, and reasonable attorney fees, and any equitable relief
that the court may determine is appropriate.
History: 1995 c 193 s 5

325G.208 MANUFACTURER'S DUTY TO PROVIDE REIMBURSEMENT FOR
TEMPORARY REPLACEMENT OF ASSISTIVE DEVICES; PENALTIES.
    Subdivision 1. Requirement. Whenever an assistive device covered by a manufacturer's
express warranty is tendered by a consumer to the dealer from whom it was purchased or
exchanged for the repair of a defect, malfunction, or nonconformity to which the warranty is
applicable and at least one of the following conditions exists, the manufacturer shall provide
directly to the consumer for the duration of the repair period, a replacement assistive device or a
rental assistive device reimbursement to pay for the cost incurred by the consumer for renting a
replacement assistive device. The applicable conditions are as follows:
(1) the repair period exceeds ten working days, including the day on which the device is
tendered to the dealer for repair; or
(2) the defect, malfunction, or nonconformity is the same for which the assistive device has
been tendered to the dealer for repair on at least two previous occasions.
    Subd. 2. Duration of duty. This section applies for the period of the manufacturer's express
warranty.
History: 1995 c 193 s 6

CONSUMER TRANSACTIONS;

DEFICIENCY JUDGMENTS

325G.21 DEFICIENCY JUDGMENTS; CONSUMER TRANSACTIONS; DEFINITIONS.
    Subdivision 1. Scope. As used in section 325G.22, the following terms shall have the
meanings assigned to them.
    Subd. 2. Consumer credit transaction. "Consumer credit transaction" means a sale of
personal property, or a loan arranged to facilitate the purchase of personal property, in which (a)
credit is granted by a seller or a lender who regularly engages as a seller or lender in credit
transactions of the same kind; (b) the buyer is a natural person; (c) the personal property is
purchased primarily for a personal, family or household purpose, and not for a commercial,
agricultural, or business purpose; and (d) a security interest is retained by the seller or lender.
It does not include a transaction pursuant to an open end credit plan authorized by sections
334.16 to 334.18.
    Subd. 3. Personal property. "Personal property" includes goods. It does not include real
property, or personal property which is furnished or used, at the time of sale or subsequently, in
the modernization, rehabilitation, repair, alteration, improvement or construction of real property
so as to become a part thereof whether or not severable therefrom.
    Subd. 4. Seller or lender. "Seller or lender" includes an assignee of either.
History: 1977 c 180 s 1

325G.22 LIMITS ON BUYER'S LIABILITY.
    Subdivision 1. Personal liability of buyer limited. If the seller or lender repossesses or
voluntarily accepts surrender of personal property in which the seller or lender has a security
interest arising out of a consumer credit transaction and the aggregate amount of the credit
extended in the transaction was $3,000 or less, the buyer is not personally liable to the seller or
lender for the unpaid balance of the debt arising from the consumer credit transaction, and the
seller or lender is not obligated to resell the collateral.
    Subd. 1a. Adjustment of dollar amounts. The dollar amount in subdivision 1 shall change
periodically as provided in section 550.37, subdivision 4a.
    Subd. 2. Buyer's liability. The buyer may be liable in damages to the seller or lender if the
buyer has wrongfully damaged the collateral or wrongfully failed to make the collateral available
to the seller or lender.
    Subd. 3. Restriction on repossession, levy, and sale. If the seller or lender elects to bring
an action and obtains judgment against the buyer for a debt arising from a consumer credit
transaction, when under this section the seller or lender would not be entitled to a deficiency
judgment on repossessing the collateral, (a) the seller or lender may not repossess the collateral,
and (b) the collateral is not subject to levy or sale on execution or similar proceedings pursuant
to the judgment.
History: 1977 c 180 s 2; 1986 c 444; 1990 c 464 s 5

CLUB CONTRACTS

325G.23 DEFINITIONS.
    Subdivision 1. Scope. As used in sections 325G.23 to 325G.28, the terms defined in this
section have the meanings given them.
    Subd. 2. Club. "Club" means any health club, social referral club or buying club.
    Subd. 3. Contract. "Contract" means any agreement by which one becomes a member
of a club.
    Subd. 4. Health club. "Health club" means any corporation, partnership, unincorporated
association, or other business enterprise having the primary purpose of offering one or more
facilities for instruction, training, encouragement, or assistance in physical fitness, in return for
the payment of a fee entitling the member to the use of the facilities. The term does not include
any nonprofit organizations, any private club owned and operated by its members, or any facility
operated by the state or any of its political subdivisions.
    Subd. 5. Social referral club. "Social referral club" means any corporation, partnership,
unincorporated association or other business enterprise organized for profit with the primary
purpose of matching members of the opposite sex, by the use of computer or any other means,
to facilitate dating or general social contact.
    Subd. 6. Buying club. "Buying club" means any corporation, partnership, unincorporated
association or other business enterprise organized for profit with the primary purpose of providing
benefits to members from the cooperative purchase of services or merchandise.
    Subd. 7. Member. "Member" means a status by which any natural person is entitled to
any of the benefits of a club.
    Subd. 8. Prepayment. "Prepayment" means any payment over $50 for service or
merchandise made before the service is rendered or the merchandise is received. The term
"prepayment" includes, but is not limited to, the payment of any service fee, initiation fee,
application fee, administrative fee, deposit fee, processing fee, enrollment fee, maintenance fee, or
similar fee no matter how the fee is denominated. It is not a prepayment if a payment for service
is made on the same day the service is rendered. Money received by a club from a financial
institution upon assignment of a contract shall be considered prepayment when and to the extent
the member is required to make prepayments to the financial institution pursuant to the contract.
    Subd. 9. Business day. "Business day" means any day other than a Saturday, Sunday, or
holiday as defined in section 645.44.
    Subd. 10. Outstanding liabilities. "Outstanding liabilities" means the amount of prepayment
actually received from club members less the amount of the prepayment as prorated over the
duration of any contract for services rendered by the club.
History: 1974 c 418 s 1; 1987 c 367 s 1-3

325G.24 RIGHT OF CANCELLATION.
Any person who has elected to become a member of a club may cancel such membership by
giving written notice of cancellation any time before midnight of the third business day following
the date on which membership was attained. Notice of cancellation may be given personally or
by mail. If given by mail, the notice is effective upon deposit in a mailbox, properly addressed
and postage prepaid. Notice of cancellation need not take a particular form and is sufficient if it
indicates, by any form of written expression, the intention of the member not to be bound by the
contract. Cancellation shall be without liability on the part of the member and the member shall be
entitled to a refund, within ten days after notice of cancellation is given, of the entire consideration
paid for the contract. Rights of cancellation may not be waived or otherwise surrendered.
History: 1974 c 418 s 2

325G.25 CONTRACT REGULATION.
    Subdivision 1. Form and content. A copy of every contract shall be delivered to the
member at the time the contract is signed. Every contract must be in writing, must be signed by
the member, must designate the date on which the member signed the contract and must state,
clearly and conspicuously in boldface type of a minimum size of 14 points, the following:

"MEMBERS' RIGHT TO CANCEL"

"If you wish to cancel this contract, you may cancel by delivering or mailing a written notice
to the club. The notice must say that you do not wish to be bound by the contract and must be
delivered or mailed before midnight of the third business day after you sign this contract. The
notice must be delivered or mailed to: (Insert name and mailing address of club). If you cancel,
the club will return, within ten days of the date on which you give notice of cancellation, any
payments you have made."
    Subd. 1a. Alternative cancellation notice. In lieu of the notice of cancellation required by
subdivision 1, the seller may provide notice in a manner which conforms to applicable federal
law or regulation or section 325G.08 so long as the notice provides the information required by
subdivision 1.
    Subd. 2. Failure to contain notice. Every contract which does not contain the notice
specified in this section may be canceled by the member at any time by giving notice of
cancellation by any means.
History: 1974 c 418 s 3; 1975 c 357 s 1,2

325G.26 LIMITATION ON MEMBERSHIP PERIOD.
No contract shall be valid for a term longer than 18 months from the date upon which the
contract is signed. However, a club may allow a member to convert a contract into a contract for a
period longer than 18 months after the member has been a member of the club for a period of
at least six months. The duration of the contract shall be clearly and conspicuously disclosed in
the contract in bold face type of a minimum size of 14 points.
History: 1974 c 418 s 4; 1986 c 444

325G.27 REGISTRATION REQUIREMENTS, SURETY BOND REQUIREMENT,
ALTERNATIVE SECURITY.
    Subdivision 1. Registration requirement. (a) Every buying, health, or social referral club
doing business in this state shall register with the attorney general and provide all information
requested on forms the attorney general provides. The person shall furnish the full name and
address of each business location where the club's memberships are sold as well as any other
registration information the attorney general considers appropriate.
(b) Each registrant under this section shall pay a registration fee of $250 at the time of
registration.
On September 1 of each year following the initial registration, each registrant shall pay a
renewal fee of $150 to the attorney general.
(c) The attorney general may bring an action for mandamus against a club to require the club
to register or to have and maintain the surety required by this section.
    Subd. 2. Surety bond requirement; alternative security. (a) Every club shall maintain
a surety bond issued by a surety company admitted to do business in this state in an amount
not less than the aggregate value of outstanding liabilities to members as defined in section
325G.23, subdivision 10. In the case of a renewed lifetime contract, the outstanding liabilities
shall be calculated on a prorated basis for not more than 36 months. A copy of the bond shall
be filed with the attorney general.
(b) No club shall be required to file with the attorney general a bond, letter of credit, or cash
in excess of $200,000, regardless of the number of facilities.
(c) The amount of the bond shall be based upon a financial statement covering the
immediately preceding 12-month period of the club, and shall be executed under the penalty of
perjury by any two duly constituted officers of the corporation, describing the club's outstanding
liabilities to the members using generally accepted accounting principles.
The financial statement shall be submitted at the time of initial registration and updated at
each renewal under subdivision 1.
(d) If a club's outstanding liabilities to the members exceed the amount of the bond,
and the club has failed to increase the bond, then the club shall immediately stop selling club
memberships and shall refrain from selling club memberships until the requirements of this
subdivision have been satisfied.
(e) An irrevocable letter of credit in a form acceptable to the attorney general, or a cash
deposit, may be filed with the attorney general instead of a surety bond where evidence is
presented that a surety bond cannot be obtained.
(f) This subdivision does not apply to any club which files a declaration with the attorney
general, executed under penalty of perjury by the owner or manager of such club, stating that
the club does not require or in the ordinary course of business does not receive prepayment
for services or merchandise.
    Subd. 3. Claims. (a) A member of a club who suffers or sustains any loss of prepayments
of membership fee by reason of the closing of a facility or bankruptcy by the seller of the club
membership agreement shall file a claim with the surety and, if the claim is not paid, may bring
an action based on the bond and recover against the surety. In the case of a letter of credit or
cash deposit that has been filed with the attorney general, the member may file a claim with
the attorney general.
(b) Any claim under paragraph (a) shall be filed no later than one year from the date on
which the facility closed or bankruptcy was filed.
(c) The attorney general may file a claim with the surety on behalf of any member. The surety
shall pay the amount of the claims to the attorney general for distribution to claimants entitled to
restitution and shall be relieved of liability to that extent.
(d) The liability of the surety under any bond may not exceed the aggregate amount of the
bond, regardless of the number or amount of claims filed.
(e) If the claims filed exceeds the amount of the surety bond, the surety shall pay the amount
of the bond to the attorney general for distribution to claimants entitled to restitution and shall be
relieved of all liability under the bond.
    Subd. 4. Registration and surety bond for planned facility or facility under construction.
(a) Each club that sells club memberships to be offered at a planned facility or a facility under
construction shall:
(1) register under subdivision 1 before conducting sales activities; and
(2) maintain a surety bond, irrevocable letter of credit, or cash deposit filed with the attorney
general, in an amount not less than $25,000 until the value of obligations to consumers exceeds
that amount.
(b) Until the time a person opens a club facility, the amount of the surety shall be increased
as necessary to take into account increases in the person's outstanding liabilities to the members
with a final adjustment to be made at the time of opening.
(c) Upon opening the facility, the person is subject to subdivisions 1 to 3.
History: 1974 c 418 s 5; 1987 c 367 s 4

325G.28 VIOLATIONS.
    Subdivision 1. Attorney general enforcement authority. The attorney general shall
investigate violations of sections 325G.23 to 325G.28. When the attorney general possesses
information providing reasonable ground to believe that any person has violated or is about to
violate any provision of sections 325G.23 to 325G.28, or that any club is insolvent the attorney
general shall be entitled on behalf of the state (a) to sue for and have injunctive relief in any court
of competent jurisdiction against any such violation or threatened violation without abridging
the penalties provided by law; (b) to sue for and recover for the state, from any person who is
found to have violated any provision of sections 325G.23 to 325G.28, a civil penalty, in an
amount to be determined by the court, not in excess of $25,000; and in case the club has failed
to maintain the bond required by sections 325G.23 to 325G.28, or is insolvent or in imminent
danger of insolvency, to sue for and have an order appointing a receiver to wind up its affairs.
All civil penalties recovered under this subdivision shall be deposited in the general fund of
the state treasury.
    Subd. 2. Private remedies. In addition to the remedies otherwise provided by law, any
person injured by a violation of any of the provisions of sections 325G.23 to 325G.28, may bring
a civil action and recover damages, together with costs and disbursements, including reasonable
attorney's fees, and receive other equitable relief as determined by the court.
History: 1974 c 418 s 6; 1986 c 444

CONSUMER CONTRACTS; PLAIN LANGUAGE REQUIREMENTS

325G.29 CITATION.
Sections 325G.29 to 325G.36 may be cited as the "Plain Language Contract Act".
History: 1981 c 274 s 1

325G.30 DEFINITIONS.
    Subdivision 1. Terms. As used in sections 325G.30 to 325G.36, the terms defined in this
section have the meanings given them.
    Subd. 2. Consumer. "Consumer" means any individual who, primarily for personal, family
or household purposes: (1) gives consideration for an interest in any services or personal property,
including money; (2) transfers or authorizes a security interest on any personal property; or (3)
leases residential premises for a term not exceeding three years.
    Subd. 3. Consumer contract. "Consumer contract" means any written contract with a
consumer except: (1) a contract where the price, excluding interest or finance charges, is more
than $50,000; (2) a contract through which a consumer mortgages an interest in realty or obtains
money or credit to be used to purchase or refinance an interest in realty; (3) a contract in which
the sale of personal property is merely incidental to the sale of an interest in realty; (4) a written
agreement involving a transaction in securities with a broker-dealer or investment advisor
registered with the Securities and Exchange Commission; or (5) a transaction in commodities with
a futures commission merchant registered with the Commodities Futures Trading Commission.
History: 1981 c 274 s 2; 1983 c 216 art 2 s 7; 1983 c 288 s 4; 1984 c 414 s 1

325G.31 PLAIN LANGUAGE REQUIRED.
Except as provided in section 325G.32, every consumer contract shall be written in a
clear and coherent manner using words with common and everyday meanings and shall be
appropriately divided and captioned by its various sections.
History: 1981 c 274 s 3

325G.32 EXCEPTIONS.
    Subdivision 1. Other statutes or regulations. Section 325G.31 does not apply to any
consumer contract for which a federal or state statute, rule or regulation prescribes standards of
readability applicable to the entire contract. Section 325G.31 does not apply to particular words,
phrases, provisions or forms of agreement specifically required, recommended or endorsed by
a state or federal statute, rule or regulation.
    Subd. 2. Customarily used technical terms. A consumer contract may include technical
terms to describe the services or property which are the subject of the contract, if the terms are
customarily used by consumers in connection with the services or property.
History: 1981 c 274 s 4

325G.33 REMEDIES.
    Subdivision 1. Enforcement authority. Any violation of section 325G.31 is a violation of a
law under section 8.31, subdivision 1. The remedies provided in section 8.31, subdivisions 3 and
3a , are limited as provided in section 325G.34.
    Subd. 2. Reformation. In addition to the remedies provided in section 8.31, a court reviewing
a consumer contract may reform or limit a provision so as to avoid an unfair result if it finds that:
(1) a material provision of the contract violates section 325G.31;
(2) the violation caused the consumer to be substantially confused about any of the rights,
obligations or remedies of the contract; and
(3) the violation has caused or is likely to cause financial detriment to the consumer.
If the court reforms or limits a provision of a consumer contract, the court shall also
make orders necessary to avoid unjust enrichment. Bringing a claim for relief pursuant to this
subdivision does not entitle a consumer to withhold performance of an otherwise valid contractual
obligation. No relief shall be granted pursuant to this subdivision unless the claim is brought
before the obligations of the contract have been fully performed.
History: 1981 c 274 s 5

325G.34 LIMITS ON REMEDIES.
    Subdivision 1. Penalties. In any proceeding in which civil penalties are claimed from a party
for a violation of section 325G.31, it is a defense to the claim that the party made a good faith and
reasonable effort to comply with section 325G.31.
    Subd. 2. Attorney's fees. A party who has made a good faith and reasonable effort to
comply with section 325G.31 shall not be assessed attorney's fees or costs of investigation in an
action for violating section 325G.31.
    Subd. 3. Class action attorney's fees. In any class action or series of class actions which
arise from the use by a person of a particular consumer contract found to violate section 325G.31,
the amount of attorney's fees and costs of investigation assessed against that person and in favor
of the consumer class or classes may not exceed $10,000.
    Subd. 4. Limits on consumer actions. Violation of section 325G.31 is not a defense to a
claim arising from a consumer's breach of a consumer contract or to an action for eviction. A
consumer may recover actual damages caused by a violation of section 325G.31 only if the
violation caused the consumer to be substantially confused about the rights, obligations or
remedies of the contract.
    Subd. 5. Statute of limitations. Any claim that a consumer contract violates section 325G.31
must be raised within six years of the date the contract is executed by the consumer.
History: 1981 c 274 s 6; 2003 c 2 art 2 s 3

325G.35 REVIEW BY THE ATTORNEY GENERAL.
    Subdivision 1. Process of review. Any seller, creditor or lessor may submit a consumer
contract to the attorney general for review as to whether the contract complies with the
requirements of section 325G.31. After reviewing the contract the attorney general shall: (1)
certify that the contract complies with section 325G.31; (2) decline to certify that the contract
complies with section 325G.31 and note objections to the contractual language; (3) decline
to review the contract and refer the party submitting the contract to other previously certified
contracts of the same type; (4) decline to review the contract because the contract's compliance
with section 325G.31 is the subject of pending litigation; or (5) decline to review the contract
because the contract is not subject to section 325G.31.
    Subd. 2. Process not reviewable. Actions of the attorney general pursuant to subdivision 1
are not subject to chapter 14, and are not appealable.
    Subd. 3. Limited effect of certification. Any consumer contract certified pursuant to
subdivision 1 is deemed to comply with section 325G.31. Certification of a consumer contract
pursuant to subdivision 1 is not otherwise an approval of the contract's legality or legal effect.
    Subd. 4. Review not required. Failure to submit a contract to the attorney general for review
pursuant to subdivision 1 does not show a lack of good faith nor does it raise a presumption that
the contract violates section 325G.31. If pursuant to subdivision 1 the attorney general refers
a party to a previously certified contract, that the party chooses not to use the contract does
not show a lack of good faith nor does it raise a presumption that a contract used by that party
violated section 325G.31.
    Subd. 5. Fee for review. The attorney general may charge a fee, not to exceed $50, for the
costs of reviewing a consumer contract pursuant to subdivision 1.
History: 1981 c 274 s 7; 1982 c 424 s 130; 1986 c 444

325G.36 WAIVERS VOID.
    Subdivision 1. Consumer contract waivers. Any provision of a consumer contract which
waives or attempts to waive any provision of sections 325G.29 to 325G.36 is void.
    Subd. 2. Consumer credit transaction contract waivers. Any provision of a consumer
credit transaction contract which waives or attempts to waive any provision of section 325G.22 is
void.
History: 1981 c 274 s 8; 1987 c 349 art 1 s 38

325G.37 EFFECTIVE DATE.
Sections 325G.29 to 325G.34 and 325G.36 take effect on July 1, 1983. Section 325G.35
takes effect May 29, 1981. Sections 325G.29 to 325G.36 do not affect any consumer contract
executed before July 1, 1983. A previously existing consumer contract renewed after July
1, 1983, is subject to sections 325G.29 to 325G.36. No provision for renewal of a consumer
contract is invalid merely because compliance with sections 325G.29 to 325G.36 changes the
form of the renewal agreement. For the purposes of this section periodic tenancies renew at the
commencement of each rental period.
History: 1981 c 274 s 9

CREDIT CARD DISCLOSURE ACT

325G.40 CITATION.
Sections 325G.40 to 325G.47 may be cited as the "Credit Card Disclosure Act."
History: 1987 c 256 s 1

325G.41 DEFINITIONS AND COMPUTATIONS.
    Subdivision 1. Generally. Except as otherwise provided, the terms used in sections 325G.40
to 325G.47 have the meanings prescribed in Code of Federal Regulations, title 12, part 226.
Except as otherwise provided, the computations required under sections 325G.40 to 325G.47 shall
be made as provided in Code of Federal Regulations, title 12, part 226.
    Subd. 2. Credit card application. "Credit card application" means any written form,
document, or material distributed by or on behalf of a creditor and designed to be used by a
consumer to request or accept the issuance of a credit card.
    Subd. 3. Creditor. "Creditor" includes any credit card issuer that extends either open-end
credit or credit that is not subject to a finance charge and is not payable in installments.
History: 1987 c 256 s 2

325G.415 CREDIT CARD DISCLOSURE REPORTS.
    Subdivision 1. Filing with commissioner of finance. A creditor who distributes a credit
card application in this state after July 31, 1992, must file with the commissioner of finance a
written report containing the disclosures required or allowed by sections 325G.42 and 325G.46.
This report must be filed annually on December 31.
    Subd. 2. Rulemaking. The commissioner of finance shall adopt rules governing: (1) the form
and content of reports to be filed under subdivision 1; and (2) public access to the information filed.
The commissioner of finance may adopt other rules as necessary to administer subdivision 1.
History: 1992 c 552 s 1; 2003 c 112 art 12 s 50

325G.42 CREDIT CARD DISCLOSURES.
    Subdivision 1. Required disclosures. A credit card application distributed in this state must
disclose the following terms of the credit card plan, if applicable:
(1) Any periodic rate or rates that may be applied to the account, expressed as an annual
percentage rate or rates. If the account is subject to a variable rate, the creditor may disclose the
rate as of a specific date and indicate that the rate may vary, or may identify the index and any
amount or percentage added to, or subtracted from, that index and used to determine the rate.
For purposes of this section, the amount or percentage must be referred to as the "spread." If
charges incurred by use of the credit card are due and payable upon receipt of a periodic statement
of charges, then that fact must be disclosed.
(2) Any membership, participation, or similar fee that may be imposed as a condition of the
issuance or renewal of a credit card, expressed as an annual amount.
(3) Any minimum, fixed, transaction, activity, or similar charge.
(4) Any other fees that may be charged to the account, including late payment fees and
charges for exceeding credit limits.
(5) The date or occasion upon which the finance charge, if any, begins to accrue on a
transaction.
    Subd. 2. Form of disclosures. The disclosures required under this section shall be written in
plain language, as defined in section 325G.31; shall be in boldface type of a minimum size of
ten points; shall be clear and conspicuous; and shall be prominently set apart from the remaining
portions of the credit card application or other written material, by the use of margins, enclosures,
underlining, contrasting colors, or similar methods.
    Subd. 3. Optional disclosure chart. A creditor need not present the disclosures required
by subdivision 1 in any specific form other than as provided in subdivision 2. However, the
disclosures are conclusively presumed to satisfy the requirements of subdivision 1 if the
disclosures satisfy the requirements of subdivision 2 and are presented in a chart, substantially
similar to the following description:
(1) The chart shall consist of contiguous boxes, and each required disclosure shall appear
exclusively within one of the boxes.
(2) The first box shall contain the wording "ANNUAL PERCENTAGE RATE" if the creditor
charges a fixed rate, or "VARIABLE RATE INDEX AND SPREAD," if appropriate, underneath
which the creditor's rate will appear. If full payment is due upon receipt of a periodic statement of
charges, then the first box shall state "Full payment due upon receipt of billing statement."
(3) The second box shall contain the wording "OTHER FEES" and shall disclose all other
fees, including late payment penalties and any charges for exceeding the credit limit.
(4) The third box shall contain the wording "ANNUAL FEE," underneath which the
appropriate information shall be disclosed.
(5) The fourth box shall contain the wording "TRANSACTION FEE," underneath which the
appropriate information shall be disclosed.
(6) The fifth box shall contain the wording "FREE PERIOD" or "GRACE PERIOD,"
underneath which the appropriate information shall be disclosed. For example, "30 days," or "yes,
if full payment is received by next billing date," or "yes, if full new balance is paid by due date."
    Subd. 4. Additional disclosures permitted. Nothing in this section prohibits a creditor from
disclosing additional terms, conditions, or information, whether or not relating to the disclosures
required under this section, in conjunction with the disclosures required by this section.
    Subd. 5. Exception. This section does not apply to any advertisement, catalogue, or other
written document or material which does not contain a credit card application.
History: 1987 c 256 s 3

325G.43 PENALTIES.
A person violating section 325G.42 is subject to the penalties provided in section 8.31.
History: 1987 c 256 s 4

325G.44 DAMAGES.
A person injured by a violation of section 325G.42 may recover actual damages in an action
other than a class action, together with costs and disbursements, including a reasonable attorney's
fee, and receive other equitable relief as determined by the court.
History: 1987 c 256 s 5

325G.45 FEDERAL LAW.
If a creditor becomes required by federal law to make disclosure of the terms required in
section 325G.42 in connection with the distribution of a credit card application, then the creditor
is considered to have complied with the requirements of section 325G.42 if the creditor complies
with the federal disclosure requirement.
History: 1987 c 256 s 6

325G.46 ALTERNATIVE COMPLIANCE.
In lieu of complying with section 325G.42, subdivision 2, a creditor, in connection with the
distribution of a credit card application, may disclose the specific terms of section 325G.42 in
compliance with Code of Federal Regulations, title 12, part 226.5.
History: 1987 c 256 s 7

325G.47 NOTIFICATION OF ANNUAL FEE.
The customer must be notified of the amount of the annual fee, if any, and the date the fee
is payable at least 30 days before the account is charged for the fee, and during that 30-day
period the customer may cancel the open-end credit plan without penalty other than payment
of any outstanding balance.
History: 1987 c 256 s 8

MEMBERSHIP TRAVEL CONTRACTS

325G.50 MEMBERSHIP TRAVEL CONTRACTS; CANCELLATION.
    Subdivision 1. Definitions. (a) For purposes of this section and sections 325G.501 and
325G.505, the following terms have the meanings given them:
(1) "Membership travel contract" or "contract" means an agreement offered or sold in this
state evidencing a buyer's right to make travel arrangements from or through a membership travel
operator and includes a membership that provides for this use.
(2) "Membership travel operator" means a person offering or selling membership travel
contracts paid for by a fee or periodic payments.
(3) "Travel arrangements" means travel reservations or accommodations, tickets for domestic
or foreign travel by air, rail, ship, bus, or other medium of transportation, or hotel or other lodging
accommodations for members.
(4) "Date of consummation of service" means the date on which the buyer of the contract is
provided with all materials necessary to allow the buyer to make travel arrangements that are the
subject of the contract and is provided all materials explaining the buyer's rights, obligations,
benefits, and restrictions under the membership travel contract.
(5) "Gift" means a prize, award, rebate, bonus, coupon, credit, voucher, or other item of
value offered or provided to a consumer as part of the solicitation to purchase a membership
travel contract.
(b) The definitions in paragraph (a) do not apply to the offer, sale, exchange, or other use of a
timeshare interest, as defined in section 83.20, subdivision 13.
    Subd. 2. Buyer's right to cancel. In addition to other rights the buyer may have, the buyer
may cancel a membership travel contract until midnight of the tenth business day after the date
of consummation of service for the contract.
To be effective, a notice of cancellation must be given by the buyer in writing to the
membership travel operator at the operator's address. This address must be included in the
membership travel contract. The notice, if given by mail, is effective upon deposit in a mailbox,
properly addressed to the operator and postage prepaid. The notice is sufficient if it shows, by
any form of written expression, the buyer's intention not to be bound by the membership travel
contract.
Cancellation is without liability on the part of the buyer and the buyer is entitled to a refund,
within ten days after notice of cancellation is given, of the entire consideration paid for the
contract. Rights of cancellation may not be waived or otherwise surrendered.
    Subd. 3. Written notice to members. A copy of the contract must be delivered to the
buyer at the time the contract is signed. The contract must be in writing, must be signed by the
buyer, must designate the date on which the buyer signed the contract, and must state, clearly
and conspicuously, in boldface type of a minimum size of 14 points immediately adjacent to
the buyer's signature, the following:

"MEMBERS' RIGHT TO CANCEL

If you wish to cancel this contract, you may cancel by delivering or mailing a written notice
to the membership travel operator. The notice must say that you do not wish to be bound by the
contract and must be delivered or mailed before midnight of the tenth business day after you sign
this contract. The notice must be delivered or mailed to: (Insert name and mailing address of
membership travel operator). If you cancel, the membership travel operator will return, within ten
days of the date on which you give notice of cancellation, any payments you have made. Your
right to cancel continues until midnight of the tenth business day after the day on which you are
provided with all materials necessary to allow you to make travel arrangements and all materials
that explain your rights, obligations, benefits, and restrictions under the contract."
    Subd. 3a. Oral notice to members. At the time the contract is signed by the buyer, the
membership travel operator shall orally inform the buyer of the buyer's right to cancel the contract
described in subdivision 2.
    Subd. 4. Cancellation at any time. (a) A contract which does not contain the notice specified
in subdivision 3 may be canceled by the buyer at any time by giving notice of cancellation by
any means.
(b) If the oral notice required by subdivision 3a has not been given to the buyer at the time
the contract was signed, the buyer may cancel the contract at any time by giving notice of
cancellation by any means.
(c) If the buyer has a continuing right to cancel under this subdivision, the membership
travel operator, or any affiliate or successor to the membership travel operator, shall not solicit
the buyer to enter into a new contract, unless before the solicitation, the membership travel
operator provides the following:
(1) at the same time as the initial written solicitation to enter a new contract, a written
notice on a separate sheet of paper that in boldface type of a minimum size of 14 points states
the following:

"RIGHT TO CANCEL

You have the right to cancel the contract that you previously entered with (name of
membership travel operator). If you cancel the contract with (name of membership travel
operator), you have the right to receive a refund of all money paid for the contract. You also will
not be required to make any further payments under that contract.
This is an attempt to solicit you to enter a new contract.
If you would like more information concerning Minnesota laws governing membership
travel contracts, please contact the Minnesota Attorney General's Office at (the Minnesota
Attorney General's Office address and telephone number)."; and
(2) at the same time as the initial oral solicitation to enter a new contract, an oral notice that
clearly reiterates the statement contained in clause (1).
The attorney general shall provide a number for insertion into this notice on request of the
membership travel operator.
History: 1990 c 411 s 1; 2003 c 125 s 1; 2005 c 70 s 1

325G.501 MEMBERSHIP TRAVEL CONTRACTS SOLICITATION GIFT OFFERS.
(a) No membership travel operator shall offer a gift, either directly or indirectly, to a person
in Minnesota unless the membership travel operator clearly discloses the following information at
the same time and in the same manner and prominence as the offer of the gift:
(1) the true name or names of the travel club operator and the address of the travel club
operator's principal place of business;
(2) the estimated retail value of the gift, which must not be more than twice the direct cost to
the membership travel operator for the gift;
(3) any requirement that the person receiving the notice pay taxes, refundable or
nonrefundable deposits, or any other charges to obtain or use a gift, including the nature and
amount of the charges;
(4) if receipt of the gift is subject to a requirement that the person attend a meeting with the
travel club operator for the purpose of soliciting the person to enter into a membership travel
contract, a statement that the requirement applies, a description of the membership travel contract
the membership travel operator wishes to sell, the approximate length of the meeting, and the
requested price for the membership travel contract;
(5) any limitations on eligibility to receive the gift; and
(6) if use of the gift is subject to any restrictions, including, but not limited to, travel
restrictions, a statement that a restriction applies, and a detailed description of the restriction.
History: 2005 c 70 s 2

325G.505 MEMBERSHIP TRAVEL CONTRACTS IN EXCESS OF $500.
    Subdivision 1. Scope. This section applies to a membership travel operator who offers
or sells membership travel contracts when the cost of the membership travel contract to the
consumer is $500 or more. This section does not apply to a membership travel club that offers
travel benefits solely for motor vehicle use.
    Subd. 2. Public offering statement. A membership travel operator shall prepare and
distribute to any prospective purchaser, before a membership travel contract is executed by
the prospective purchaser, a public offering statement that clearly and prominently discloses
the following:
(1) the name and principal address of the membership travel operator;
(2) the length of time that the membership travel operator has been in business and the
length of time that the membership travel operator has been selling in Minnesota and the length
of time that the membership travel operator has been selling in states other than Minnesota,
membership travel contracts substantially similar to the membership travel contracts offered to
the prospective purchaser;
(3) the percentage of Minnesota purchasers of membership travel contracts during the
previous two years who exercised their right to cancel, requested a refund, or made a complaint,
based on the information kept pursuant to subdivision 4, or if the travel club has been operating in
Minnesota for less than two years, the number of membership travel contracts that have been
sold in Minnesota and the number of these customers who have exercised their right to cancel,
requested a refund, or made a complaint as required to be recorded in subdivision 4;
(4) to the extent applicable to either the membership travel operator, or any parent or
controlling entity of the membership travel operator, or any executive, partner, director, or owner
of a 20 percent or more interest in the membership travel operator or in any parent or controlling
entity of the membership travel operator, or any other membership travel operator in this or any
other state which has an executive, partner, director, or owner of a 20 percent or more interest
in common with the membership travel operator or in any parent or controlling entity of the
membership travel operator, the existence and nature of the following types of legal actions:
(i) any indictment, conviction, judgment, decree, assurance of discontinuance or similar
settlement document, or order of any court or administrative agency for, or pending lawsuit
alleging, violation of a federal or state law or regulation in connection with activities relating to
the rendition of travel services or involving any criminal law or involving any consumer fraud,
false advertising, deceptive trade practices, or similar consumer protection law; or
(ii) any unsatisfied judgments or bankruptcy filing; and
(5) if the membership travel operator uses a third-party travel agent or membership travel
operator to make travel arrangements provided for in the contract, the name, physical and Internet
address, and telephone number of the third party or parties, and a statement of the services
provided by the third party or parties that can be purchased directly from the third party or parties.
    Subd. 3. Oral disclosures. A membership travel operator shall orally disclose to any
prospective purchaser, before a membership travel contract is executed by the prospective
purchaser, the information in the public offering statement as required in subdivision 2, and
whether the membership travel operator uses a third-party travel agent or membership travel
operator to make travel arrangements provided for in the contract.
    Subd. 4. Complaint record keeping. A membership travel operator shall keep written
records of all buyers of a membership travel contract who either exercised their right to cancel,
requested, in writing or orally, a partial or full refund of the price paid for the contract, or made a
written or oral complaint about their purchase of the contract, the solicitation for the contract, or
any aspect of the membership travel contract sale or service.
    Subd. 5. Failure to provide disclosures. The right to cancel provided under section 325G.50
shall continue until ten business days after the disclosures required under this section are fully
provided to the purchaser.
History: 2003 c 125 s 2; 2005 c 70 s 3

325G.51 PENALTIES; REMEDIES.
A person who violates sections 325G.50 to 325G.505 is subject to the penalties and remedies
provided in section 8.31. The relief provided in this subdivision is in addition to remedies or
penalties otherwise provided by law.
History: 1990 c 411 s 2; 2003 c 125 s 3; 2005 c 70 s 4

TELEMARKETING FRAUD; CONSUMER EDUCATION

325G.52 CONSUMER EDUCATION; TELEMARKETING FRAUD.
    Subdivision 1. Establishment. The attorney general shall establish an outreach advocacy
network to educate citizens of the state with respect to telemarketing fraud.
    Subd. 2. Duties. The advocacy network shall:
(1) conduct clinics and seminars throughout the state to educate consumers with respect to
telemarketing fraud, including providing an explanation of rights under federal and state law, and
recommending effective strategies to combat fraud, with particular emphasis placed on educating
consumers in greater Minnesota and isolated areas of the state where victims may be targeted;
(2) facilitate outreach to groups particularly susceptible to telemarketing fraud by training
advocates for senior citizens and other consumer groups to conduct clinics and seminars in their
communities;
(3) prepare and publish informational brochures on telemarketing fraud for distribution to
consumers;
(4) serve as an information clearinghouse within the state to assist consumers and others to
obtain information with respect to current fraudulent telemarketing activity in the state;
(5) serve as a resource and provide assistance to local prosecutors and law enforcement; and
(6) identify those occupations in which persons may be in a good position to spot
telemarketing fraud and develop specialized training programs for those persons.
History: 1998 c 366 s 69